Use the Following Information to Answer the Question(s) Below $$\begin{array} { l l } \text { Investment in Pascalian bonds } & \$ 97,600 \\\text { Interst income } & 6,600\end{array}$$

question 31

Multiple Choice

Use the following information to answer the question(s) below.

Pascalian Company owns a 90% interest in Sapp Company. On January 1, 2013, Pascalian had $300,000, 6% bonds outstanding with an unamortized premium of $9,000. The bonds mature on December 31, 2017. Sapp acquired one-third of Pascalian's bonds in the open market for $97,000 on January 1, 2013. Both companies use straight-line amortization of bond discounts/premiums. Interest is paid on December 31. On December 31, 2013, the books of the two affiliates held the following balances:
$$\begin{array} { l l } 6 \% \text { bonds payable } & \$ 300,000 \\\text { Premium on bonds } & 7,200 \\\text { Interest expense } & 16,200\end{array}$$ $$\begin{array} { l l } \text { Investment in Pascalian bonds } & \$ 97,600 \\\text { Interst income } & 6,600\end{array}$$
-Bonds Payable appeared in the December 31,2013 consolidated balance sheet of Pfadt Corporation and Subsidiary in the amount of

• A)$398,925.
• B)$443,500.
• C)$441,000.
• D)$450,000.

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Definitions:

Conversion Costs

The combined costs of direct labor and manufacturing overheads, representing the costs involved in converting raw materials into finished products.

Work in Process

Inventory that includes goods in the process of being manufactured but not yet completed.

Manufacturing Cost

The total sum of expenses related to producing goods, including raw materials, labor, and overhead costs.

Equivalent Units

A concept used in process costing that converts partially completed units into a smaller number of fully completed units, facilitating cost calculation.